Anderson, Steve Friedman, Daniel Milam, Garrett Singh, Nirvikar
Year of Publication:
Working Papers, UC Santa Cruz Economics Department 565
This paper analyzes seller choices and outcomes in approximately 700 recent Internet auctions on eBay. The âBuy it Now' option that is available in these auctions allows the seller to supplement or replace the auction with a posted price offer. We use a structural model to control for the endogenous conduct of the auction (e.g., number of bids and bidders) as well as product and seller characteristics. Among other results, we find that the âBuy it Now' option was used more often by sellers with higher ratings (awarded by previous buyers) and sellers offering fewer units; and that posted prices were more prevalent for used items. Sellers obtained higher prices for unused and undamaged items overall, and especially when selling at the âBuy it Now' price.